Question # 1

If in a production process, all inputs are increased by 10% and output increase by less than 10%, then it is called

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economies of scale

diseconomies of scale

diminishing marginal returns

negative economies

When a firm using a fixed amount of land and capital takes on more workers, it finds that marginal product(MP) of labour falls but the average product(AP) of labour rises. This can be explained by the factors that

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MP of labour is grater than AP of labour

additional workers are more efficient

MP and AP are equal

AP is maximum

The government constructed a new water reservoir for the purpose of irrigation; this might be taken as

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increase in supply of capital

increase in supply of land

increase in supply of land and supply of capital

none of these

When total product (TP) reaches its maximum, Marginal product (MP) is_

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Zero

Positive

Negative

Rising

When total product falls, marginal product is.

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Zero

Positive

Negative

Falling

The concept of internal and external economics was given by.

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Adam Smith

Robbins

J.M.Keynes

Alfred Marshall

When MP is zero, TP is

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minimum

maximum

rising

falling

When diseconomies of scale outweigh economies of scale the

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long run AC curve rises

marginal cost falls

long run ATC curve falls

AVC falls

Which one will determine scale of production .

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Financial resources

Production techniques

Extant of the market

All the above

The law of variable proportions was presented by.

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Jevens

Rayon

Hicks

Valentine

Law of diminishing returns is a universal law as:

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It does apply in all aspects of an economy.

Basically it applies in agriculture.

It is hard to check it.

It applies in industry as well

When total product rises marginal product.

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Remains the same

Falls

Also rises

None of the three

Which one is the third stage of production under law of variable proportions

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Decreasing average returns

Increasing average return

Negative marginal return

Increasing marginal return

In the second stage of the law of variable of proportions the average product:

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Rises

Remains constant

Falls

None of the three

In law of diminishing returns at least one factor

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must be constant

must be owned by the firm

must be purchasable

must be efficient

Law of decreasing returns generates

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law of economic growth

law of increasing costs

law of variable costs

law of decreasing costs

The slopes of average and marginal products curves are always zero under:

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Law of increasing returns

Law of diminishing returns

Law of constant returns

Law of variable propoitions

Marginal product curve intersects average product curve when AP curve is

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minimum

maximum

rising

falling

Commercial economics are a pat of:

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Internal economics

External economics

Economies of scale

None of the three

during short period, diminishing returns may follow because

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quantity of labour is fixed

quality of labour is fixed

quantity of capital is fixed

quantity of any one factor is fixed

When MP curve cuts AP curve, the AP is at its.

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Lowest point

Highest point

Neither of the two

Eighter of the two

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